The Tories' Long Term Economic Plan Is The Emperor's New Clothes of British Politics

19/02/2015 16:14 GMT
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Updated
21/04/2015 10:59 BST

There was a moment in The Apprentice a few years ago when one of the contestants was trying to defend her business plan in a tough investor-style interview. The interviewer looks at her figure for projected profit and asks her how she is going to achieve it. Her eyes widen. She was, it seems, not expecting that question. It soon becomes apparent that her figure wasn't a plan at all: it was a number plucked from the air.

When I first heard that the Conservative Party had a long-term economic plan for the British economy, I thought I should find out what it was. But when I went to the Tories' website and looked at it, I found it so unbelievably skimpy, half-formed, and detail-free that I thought it was a practical joke. Before long any reader will come to the same conclusion as I did when I was watching the apprentice. This isn't a plan, it's words plucked from the air.

It has a section on reducing the deficit. Given their dismal progress so far, you might want to find out how. It doesn't say. It has a section on cutting tax. But where will the money come from? It doesn't say. It has a section on creating more jobs. How? It doesn't say.

It just gives you a list of things they have already done.

The irony is that the British economy is crying out for a long-term economic plan right now. The best thing a government could do to help business would be to make sure their customers and potential customers have more money to spend. Median incomes - the pay of the person in the middle - have barely gone up for a decade, so no wonder businesses on the high street are struggling. The people who would be their customers aren't going through their doors as much as they did ten or twenty years ago.

The Tories could help these businesses by putting money back in peoples' pockets by promising that government contracts would only go to companies paying the living wage, or by guaranteeing a starter job for six months to any 18 to 24 year old who had been out of work for a year. They could put money back into peoples' pockets by hiring more construction workers to build houses at a time when this country is crying out for more. But this isn't the Tory plan. It's the Labour plan.

When the National Institute of Economic and Social Research conducted an exhaustive study into how the big parties' economic policies would affect the economy, they concluded that the economy would grow faster under Labour than the Conservatives.

The second thing the Tories could do to help businesses is to cut their costs. The thing I hear my friends who run businesses complain about the most is business rates. For those who don't know, small businesses don't just pay corporation tax, they also pay taxes on their property to their local councils: business rates. Any government that wanted to help business could promise to cut and freeze business rates for 1.5 million small businesses.

It's the same with energy prices. Offices don't heat and light themselves, and bills are high because the big energy companies aren't passing on their savings from lower energy prices to the customers. Only government can force them to, and it's precisely these businesses which are going to grow the economy in the long-term. But again, this isn't the Tory plan, it's the Labour plan.

The third thing the Tories could have put in their long-term economic plan is help businesses to hire who they want, wherever they come from. Because of the changes they've made to the immigration rules, if you want to, for example, hire a computer programmer from India instead of Ireland, you probably won't be able to. The red tape on simply hiring talent is crazy. But it was the Tories who put it there!

It's a similar story with the EU. If the Tories take us out of the European Union, businesses will have more paperwork when they want to ship to France or Germany, supply chains will be hit as trucks have to wait at the EU border between Northern Ireland and the Republic, and we will all have to queue for twice as long in the non-EU citizen lines at airports. That's going to add extra time and costs to doing business, and hurt the economy. But keeping us in the EU isn't the Tories' plan, it's Labour's plan.

And what about access to investment and finance? That's one of the biggest things that businesses say they need in order to grow. And yet the Tories' plans for this are piddling. It's not the Tories who are talking about building a national investment bank so that businesses can break their reliance on cautious banks or temporary schemes, it's Ed Miliband and the Labour Party.

And then there is the question of the deficit. As John Longworth, the head of the British Chambers of Commerce, says, cutting the deficit is "not a plan for growth and enterprise." Put simply, with interest rates being as low as they are, cutting the deficit won't help businesses grow.

Five years ago George Osborne was saying that the sky would fall in if Labour didn't cut the deficit. Today, it is him who has failed to cut the deficit. What the Tories have failed to realise is that you can't cut the deficit by simply cutting government spending. You also have to make sure that the tax revenues are coming in thick and fast. Any long-term economic plan which was serious about cutting the deficit would say how it intends to increase tax revenues. It would say how it intends to raise wages past above minimum wages by encouraging businesses to pay the living wage. It might consider other sources of revenue by taxing unearned wealth such as houses which have shot up in value without their owners working any harder. But would you believe it? The Tories have no plan for any of this. This is Labour's plan.

People are beginning to notice. They're beginning to ask the Tories what their long-term economic plan actually is. When asked about it, the head of the British Chambers of Commerce recently observed "Do you know what [their plan] is? No? Neither do I."

The Tories' Long Term Economic Plan is the Emperor's New Clothes of British politics. Only Labour and Ed Miliband are really the ones with a long-term economic plan that is worthy of the name.